Deep Pockets Lead To CUNA Mutual In CardsFraud

Register now

BOSTON - (03/06/06) -- Growing numbers of credit unionmembers were reporting unauthorized transactions to police lastweek, as at least half a dozen credit unions in westernMassachusetts continued shutting down accounts and issuing new Visadebit cards. But the hundreds of members reporting unauthorizedactivity from places like St. Petersburg, Russia; Spain, Rumaniaand Pakistan were being assured by their credit union they wouldnot be liable for fraud-related losses. Credit unions, too, werecounting up the additional costs, an average of $20 each to replacecards, but were confident their expenses would be reimbursed bytheir insurer, CUNA Mutual Group. "The members are not liable, andthe credit union's insured," Richard Nobile, president of I-C FCU,in Fitchburg, told The Credit Union Journal. Several of the othercredit unions expressed confidence their insurer, CUNA Mutual, willeventually pick up the costs. Police in Fitchburg and adjacentLeominster said that dozens, if not hundreds, of credit unionmembers were reporting fraudulent activity on their cards last weekfrom overseas locations. Fitchburg Municipal Employees FCU reported147 accounts had been breached. I-C FCU put the number of itscompromised accounts in the hundreds. Workers CU reported as manyas 500 member accounts had been affected. Digital FCU, LeominsterFCU, Metropolitan CU, Sovereign Bancorp, Fitchburg Savings Bank andseveral other local institutions were reporting security breachestoo. Law enforcement officials were attributing the latest breachesto the same sources conducting similar unauthorized transactions inrecent weeks in California, Oregon, Texas, Florida, New Mexico, NewYork, Indiana and South Carolina.

For reprint and licensing requests for this article, click here.